Is there a Squatter on my China Trademark and if there is What Should I do?

A number of Chinese trademark law firms have of late been trying to drum up American clients on China trademark matters. I say this because our own China trademark lawyers have been getting a steady stream of emails from U.S. lawyers and companies contacted by these Chinese trademark law firms. The Chinese law firms are writing to US lawyers and companies to alert them of trademark filings in China of the same trademarks owned by the company in the United States. These emails from the Chinese trademark attorneys to U.S. trademark attorneys usually go as follows:

We, _________ are a specialized Chinese IP law firm. Our trademark research team took note of the following marks from a recent issue of the Chinese Trademark Gazette published on May 6, 2017, open to oppositions before August 6, 2017, Beijing time, NOT extendable. Particulars of the marks are listed below for your reference.

For your information, we, ______ IP, are a Chinese IP law firm and member of various international organizations, including INTA, ____, ____, ____. The majority of our clients are based in China, which enables us to regularly send business to our foreign associates. We will be more than pleased to establish reciprocal relationship with your esteemed firm.

We look forward to your reply. If you are NOT interested in our reporting emails of this type, please feel free to let us know via return and we will refrain from bothering you any more, your understanding is highly appreciated.

The U.S. trademark lawyers — oftentimes not knowing whether the email they just received is a scam or not — then write us asking us what is going on and what their client should do. Our response is usually something like the following:

1. Yes, something is actually happening with the marks in China. On June 14, 2016, the Chinese company _______ Outdoor Supplies Co., Ltd. filed applications for the stylized “_________” mark in Classe 7. I have attached copies of the relevant trademark information. Though it’s in Chinese you can see that the stylized mark is an exact copy of your client’s. The marks have been approved by the CTMO examiners and were published in the May 3, 2017 edition of the Trademark Gazette. If three months pass and no one files an opposition, both marks will proceed to registration.
2. Your client could indeed file an opposition to one or both marks. But unless the Chinese company has or had a business relationship with your client, the odds of a successful opposition are low. China is a first-to-file jurisdiction and the grounds for a bad-faith filing are limited. It is unlikely your client’s mark would be considered “well-known” enough to convince the CTMO that these filings were in bad faith. The Supreme People’s Court did issue some guidance suggesting China would be taking a harder line on trademark squatters, but we haven’t seen much difference in the way trademarks are examined. Note though that these oppositions are relatively inexpensive.

It does not appear the Chinese company is a trademark squatter per se; they only have two other trademarks (both registered) in their name. My guess is they actually intend to use your client’s mark in China to market or sell their own goods.

Your client has the following options at this point:

1. File an opposition to one or both of the cited marks. If these marks are important to your client and they understand the low odds of success, they probably should do this, in large part because the costs of their doing so are so low.
2. Contact the Chinese company and attempt to purchase the mark.
3. Wait three years to see what, if anything, the Chinese side does with the mark. As you perhaps already know, if the mark has not been used in commerce for three years it can be cancelled for non-use. See China Trademarks: When (and How) to Prove Use of a Mark in Commerce.

Please let me know if you have any questions or would like to discuss further.

Have you gotten one of these? What did you do and with what results?

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.